The News Last Week

It seems that in a world of 24 hour news it is really hard to distill down to the key events that we should talk to our children about. In this part of our website we will share the main bits of news that we as a family have discussed.

February 26th 2018

Why are the UK’s International Charities being criticised?

It turns out that some of their staff have been assaulting the very people they are supposed to be helping in places like Central America and Africa, and the charities themselves have been covering this up

How was this discovered?

The press discovered a major scandal affecting Oxfam. And it has since been discovered that other charities like Save the Children and the Red Cross are guilty of similar conduct

So what will happen now?

Parliament has started an inquiry and has been very critical of the leadership of the charities affected for not acting robustly and transparently as soon as they discovered the misconduct of their staff. Many of these leaders are likely to have to resign.

The charities themselves face a very serious loss of funding. The government has said that it will cease paying its grant of around £30million pounds a year to Oxfam until it cleans up its act. And hundreds of people have cancelled their regular donations to the charities concerned.

Does this matter?

Yes – very much so

The charities do lots of good work in some of the poorest countries in the world. The less money they have, the less they can do.

Also their reputations have been shredded. Haiti, for example, has said that it will no longer allow Oxfam access to the country. These charities have in the past been seen as an important way in which Western countries can help the poorest. For as long as these countries have lost confidence in them, they will look to countries like China for help and support. This will increase the influence of non-democratic countries in the poorer countries and intensify the divisions between Western democracies and countries like Russia and China.

What has been happening on Brexit?

Mrs May held an awayday with members of her Cabinet on Thursday to try and hammer out an agreed line on the nature of the trading relationship we should have in future with the EU.

And about 12 Conservative MPs have indicated that they will vote against the government in an attempt to force Mrs May to retain a customs union with the EU.

What is the significance of all this?

The fact that Mrs May seems to have made progress with her Cabinet is good news. She plans to make a speech next Friday setting out an agreed negotiating position.

But the planned vote on the customs union is very bad news for her. If, as seems likely, she loses the vote (because Labour will support the proposal), she could face a leadership challenge or – worse – have to fight another general election. This would throw the whole Brexit negotiations into confusion with a risk that nothing would have been agreed by March 2019 when the UK is due to leave the EU anyway.

So what will happen next?

Mrs May will make her speech next Friday. The EU negotiating team are likely to rubbish what she has to say and assert that the kind of trading relationship she is seeking is undeliverable. So the next round of negotiations could become deadlocked.

On the customs union, the government is likely to delay a Parliamentary vote for as long as possible in the hope that the Conservative rebels can be talked round. At stake here is the ambition to be able to negotiate free trade deals with major non-EU countries like China, the USA, Canada and Australia. If we are in a customs union with the EU, they will not allow us to do this. There is therefore a real risk that one of the main objectives of Brexit will be thwarted.

February 19th 2018

What happened in South Africa last week?

President Zuma resigned

Why?

His Party, the African National Congress, had elected Cyril Ramaphosa as their replacement leader, and he in turn forced Zuma out with the support of the majority of the party.

Zuma was very corrupt and a very bad President. South Africa has vast natural resources, but he left the country virtually bankrupt with terrible levels of unemployment and poverty. The country had had enough of him

So what happens now?

Ramaphosa is potentially a much better leader. He is a self-made multi-millionaire so does not need to augment his wealth via corruption. He is also a very shrewd leader. His accession has already led to a rise in business confidence. So he has the potential to turn the economy round and significantly improve the living conditions of the poor.

Zuma still has strong support especially in his local power base. He does not appear to have done any deal when he left office so he will almost certainly be charged with fraud and corruption. This is likely to divide the country and could lead to violence

Elections are due next year, and if Ramaphosa cannot prevent the country falling into turmoil, the ANC are likely to lose. In the long run this may well be good for the country which has become something of a one party state. But in the short term it may well result in further political instability and economic hardship.

Does this matter?

It certainly matters to the majority of people in the country who face the prospect of continuing instability and economic deprivation

The hope must be that Ramaphosa will be able to use his undoubted political skill to head this off and build confidence in the country. But he has very little time to achieve this

The risk is that he will be forced to do some kind of a deal with Zuma, and will fail to fulfil his pledge to root out corruption. If this happens South Africa faces years of political crisis.’

February 12th 2018

What happened to the Global Stock Markets?

They crashed

Why?

They had got too high, and were due for a correction

Investors worried that global inflation and interest rates are due to rise. Both these things put pressure on share prices

Many shares are now bought and sold on the basis of statistical algorithms. When shares fall sharply these algorithms can spark a much bigger sell off

Does it Matter?

Not necessarily. The fundamentals of the global economy remain pretty strong. Prolonged stock market crashes usually signal an expected economic downturn. Such a recession is not in prospect for at least another two years.

But if share prices do suffer a sustained fall this will affect economic confidence, and thus investment and growth. So economists would revise down their economic forecasts. These things happen every ten years or so. Economies pick up again, so in the long term the impact upon people’s lives is not that significant

What developments were there on Brexit?

The negotiations on the arrangements for a transition period before the UK finally leaves the EU got underway

Mrs May held two meetings with members of her Cabinet in an attempt to secure their agreement on the nature of the new trading relationship we should establish with the EU

Did all this go well?

The EU negotiator, M Barnier, made a number of threats about sanctions the EU would impose on the UK if we did not agree to their terms or failed to implement them fully. For example, we may not be granted a transition period at all. The EU might prohibit all flights into Europe from the UK.

Mrs May’s meetings appear to have been inconclusive. But she is talking of making a speech in Munich at the end of next week setting out her government’s position on trade. So at last we may be getting some clarity and much needed signs of leadership.

Does all this matter?

Very much so.

It is vital that the UK government agrees its position quickly now so that negotiations on trade can get underway. The longer these are delayed, the more businesses will feel that they will have to move their operations to Europe. This could mean very substantial job losses and a decline in economic activity. This in turn would lead to a fall in taxation and a loss of government revenue – as a result of which we would all be poorer.

M Barnier’s conduct is less important. His crude threats to punish the UK undermine his credibility. They are almost certainly opposed by many of the countries he claims to represent. In the long run the UK may be able to derive some advantage from this.

February 5th 2018

Where did Mrs. May go Last Week?

China

Why?

She wanted to promote improved trade links which will be very important to the UK once we leave the European Union

Was she successful?

Too early to say

But she started on the back foot. This is the first time she has attempted to improve our trading relationship with China since she became prime minister. As a result, much of the good work David Cameron did in building a strong relationship has been diminished.

What did Donald Trump do in Washington last week?

He made his State of the Union address to Congress

What is that?

The annual speech the US President makes to Congress informing them of his policies and priorities for the coming year

What was special about the speech?

The conciliatory tone. He said he wanted the nation to come together as ‘one people and one American family’. This is a major departure from the divisive rhetoric he has used in his first year in office and on the campaign trail

Will this signify a change in his leadership strategy?

Who knows. But the world must hope that it is a sign that his presidency is beginning to mature as more stable and sensible advisers exert their influence on him.

January 29th 2018

What happened in Davos last week?

The annual conference of the world’s political and business elite

Who attended?

Most of the big political names – Donald Trump, Theresa May, Emmanuel Macron, Narendra Modi (prime minister of India) etc, and the chief executives of the world’s major banks and companies

What did they talk about?

Likely developments in the world economy. How fast will it grow over the next few years? What is going to happen to inflation? Will there continue to be lots of migration from poor to rich countries?

Is it important?

Views and ideas get shared between top people. This influences their thinking, and affects their decisions on such things as trade, investment, and economic policy.

In addition, top people (especially politicians) get to know each other better. This helps to build trust between nations and thus make the world a safer and more prosperous place

What happened to the Conservative Party?

It became hopelessly split

Why?

The next round of Brexit negotiations is about to start. These will determine the nature of the trading relationship the UK will have with Europe.

Some in the party want this relationship to remain as close as possible to the present ones when we leave the EU. Others say that the price the EU would make us pay for this is far too high. We would have to accept EU laws and decisions despite the fact that we would no longer be able to help shape these. And we would be prevented from striking our own trade relationships with other countries.

On top of this, Conservative politicians on both sides of the argument are losing confidence in Theresa May as a leader. She lacks authority and confidence, and as a result appears unable to take decisions. Her government is just drifting, and not preparing properly for the critical next stage in the Brexit negotiations

What is likely to happen?

Too early to say. But it is looking increasingly likely that Conservative MPs will try to pass a motion of no confidence in Mrs May. If she loses this, she would have to stand down and there would be an election for a new Conservative leader. This would mean that we would have a new prime minister.

Watch this space!

January 22nd 2018

What happened to Carillion last week?

It went bust/It ran out of cash/It went into liquidation

Why?

It was badly managed. It lost lots of money on too many contracts, especially ones with the government and the NHS. It had huge pension debts

Does it matter?

Lots of people lost their jobs. The company owed nearly £1billion to suppliers who will not now be paid. Shareholders will lose all the money they had invested in the company. Many employees will lose part of their pensions

What will happen now?

Parliament and the government will be looking urgently to see whether the law needs to be changed to give more protection to pensioners and suppliers especially, and whether the government should change the way in which it contracts with companies for the provision of public services – especially hospitals, schools and other major infrastructure

They will also be examining whether those running the company should be made financially accountable for what went wrong in some way pay back their bonuses for example

But there needs to be a recognition that private companies do sometimes fail. If the government always moved in to save them, it would simply encourage others to take too many risks

Which foreign leader paid a visit to the UK last week?

Emmanuel Macron, President of France

Was it a successful visit?

We agreed to fund extra measures to control immigrants trying to cross into the UK from Calais. The French will be pleased about that

But Monsieur Macron continued to say that he will prevent the UK’s financial services companies from having access to the European Union after Brexit. If he succeeds this would reduce government revenue, which would mean that there would be less money to spend on such services as health, housing and education

What big sporting achievements did we have last week?

Kyle Edmund got into the quarter final of the Australian Open

We beat the Australians in the one day cricket international series which is some compensation for losing the Ashes

January 14th 2018

Why did Donald Trump cancel his trip to London?

He did not want to have to open the new US embassy

He was afraid there would be too many protesters

Does it matter?

The US is our oldest ally, and has always helped us at times of war. They are also our most important single trading partner, so help us economically. It is very important that we do not fall out with them

Why did Mrs May reshuffle her Cabinet?

She wanted to bring more young people/women/ethnic minorities into government

She wanted to strengthen her team, and make it more attractive to the electorate

Was the reshuffle a success?

It was described as a shambles. She lacked the authority to move all the people she wanted to move. Presentationally it was a disaster.

Why is the National Health Service in the news?

It is being overwhelmed by a huge increase in influenza cases. This means that not everyone who needs it can get a hospital bed, and people who need urgent treatment are not getting it

What can be done about it?

In the short term, nothing much. All health services are disrupted when there is a large increase in people needing hospital care

In the long term, alternative provision needs to be found for elderly people who need mainly nursing care which can be provided elsewhere than in hospitals. This would free up hospital beds for those who really need it

What new environmental policies did Mrs May announce?

Lots – including banning single use plastic containers by 2040, making all shops (not just big ones) charge 5p for a plastic bag, and planting a forest across the north of England

Will these make a difference?

Too early to say, but they need to. Plastic is causing huge environmental problems, especially in the oceans. Trees capture carbon and thus help to reduce the growth of global warming. We have far fewer trees in our country than most others